Question

For a stock to be in equilibrium, two conditions are necessary: (1) The stock's market price must equal its intrinsic value as seen by the marginal investor, and (2) the expected return as seen by the marginal investor must equal his or her required return.

Answer 1

Answer:

True

Explanation:

For a stock to be in equilibrium, two conditions are necessary:

(1) The stock's market price must equal its intrinsic value as seen by the marginal investor;

(2) the expected return as seen by the marginal investor must equal his or her required return.